Meridian Bioscience, Inc (Meridian Bioscience), a US-based medical device company, has reported net sales of $33.3 million for the second quarter of fiscal 2009, down 8%, compared with the net sales of $36.2 million in the year-ago quarter. It has also reported net earnings of $7.2 million, or $0.18 per diluted share, for the second quarter of fiscal 2009, compared with the net earnings of $7.3 million, or $0.18 per diluted share, in the year-ago quarter.
Meridian Bioscience has:
Reported second quarter and six months net sales of $33.3 million and $67.6 million, respectively, decreases of 8% and 4% compared to the same periods of the prior fiscal year;
Reported second quarter and six months operating income of $11.0 million and $23.2 million, increases of 2% and 6% compared to the same periods of the prior fiscal year;
Reported second quarter net earnings of $7.3 million, a decrease of 1% compared to the same period of the prior fiscal year;
Reported six months net earnings of $15.3 million, an increase of 4% over the same period of the prior fiscal year;
Reported second quarter and six months diluted per share earnings of $0.18 and $0.37, respectively, increases of 0% and 3% over the same periods of the prior fiscal year;
Revised downward its fiscal 2009 guidance of per share diluted earnings to $0.77 to $0.81 on net sales of $140 million to $144 million; and
Declared a regular quarterly cash dividend of $0.17 per share (indicated annual rate of $0.68 per share), a 21% higher regular quarterly rate compared to the prior fiscal year.
Net sales for the second fiscal quarter ended March 31, 2009, were $33.3 million as compared to $36.2 million for the same period of the prior fiscal year, a decrease of 8%. Net earnings for the second quarter of fiscal 2009 were $7.3 million or $0.18 per diluted share, down 1% and 0%, respectively from the second quarter of fiscal 2008. Diluted common shares outstanding for the second quarters of fiscal 2009 and 2008 were 41,133,000 and 41,038,000, respectively.
Net sales for the six months ended March 31, 2009, were $67.6 million as compared to $70.1 million for the same period of the prior fiscal year, a decrease of 4%. Net earnings for the six months ended March 31, 2009, were $15.3 million, or $0.37 per diluted share, up 4% and 3%, respectively, over the same period of fiscal 2008. Diluted common shares outstanding for the six months of fiscal 2009 and 2008 were 41,128,000 and 41,002,000, respectively.
Cash Dividend Matters
The board of directors declared the regular quarterly cash dividend of $0.17 per share for the second quarter ended March 31, 2009. The dividend is of record April 25, 2009, and payable May 5, 2009. This is an annual indicated cash dividend rate of $0.68 per share, representing a 21% increase over the fiscal 2008 rate of $0.56 per share.
Fiscal 2009 Guidance Revised Downward
For the fiscal year ending September 30, 2009, management expects net sales to be in the range of $140 million to $144 million and per share diluted earnings to be between $0.77 and $0.81. Previous guidance called for net sales to be between $151 million and $156 million and per share diluted earnings to be between $0.86 and $0.90. The sales and earnings guidance provided in this press release does not include the impact of any acquisitions the company might complete during fiscal 2009.
The company’s financial condition is sound. At March 31, 2009, current assets were $99.6 million, compared to current liabilities of $12.4 million, thereby producing working capital of $87.2 million and a current ratio of 8.0. Cash and equivalents on hand were $48.3 million and the company had 100% of its borrowing capacity available under its $30,000,000 commercial bank credit facility. The company has no debt obligations outstanding.
John A. Kraeutler, chief executive officer, stated, “The second quarter was impacted by a series of factors that offset the growth of our core diagnostic product lines. Upper respiratory disease experienced its weakest season in the past five years, especially with regard to our sales of rapid tests for influenza which declined approximately $3 million from the prior period. Excluding respiratory testing revenues, our US Diagnostic unit sales grew 9% for the quarter, 12% for the six month period. C. difficile and H. pylori growth rates exceeded the prior period rates and are expected to continue on their double-digit pace. In addition, our European business unit lagged due to general weakness in that market plus incurring the negative effects of a weaker Euro. With regard to Life Science, we were encouraged by strong positive sales (+8%) and income growth of approximately $0.5 million coming from our Tennessee facility as we improved our operating efficiency and saw renewed orders for viral proteins. However, the balance of our Life Science business experienced general weakness as customers reduced inventories and delayed shipments.
“Our intentions during these challenging economic times have not changed. We believe that demand from our clinical lab customers has continued to be good and that any inventory rebalancing concerns will work their way through the system. We are maintaining our focus on new product development and we have increased our investments to support the near-term introduction of new products, including our first molecular test, ILLUMIgene(TM) C. difficile, to be introduced later this year. During the quarter, we launched Premier(TM) Campy, a two hour stool pathogen test as a companion to our successful E. coli product line and, later this year we plan to introduce a 10 minute test version for Campylobacter as well.
“We have built a solid and efficient business based upon new product innovation and operating excellence. Our balance sheet and cash flow are robust and we remain focused on innovation and improved sales in our global markets.”
William J. Motto, executive chairman, commented, “Given the tremendous economic crosscurrents and uncertainty that have beset the business community in recent months, I am pleased with Meridian’s operating results during the second quarter and first half of fiscal 2009. In the face of lower sales, due primarily to a very weak flu season and customer inventory reductions, our operating income increased two percent driven by higher gross profit margins. For the six months ended March 31, 2009, operating income is 6% higher than the same period one year earlier. Overall, fiscal 2009 will be a good but not great year for Meridian and we have scaled back our sales and earnings guidance to reflect the reality of the domestic and world economic landscape. Our cash flow is strong and easily supports our working capital, capital expenditures, and cash dividend requirements. In times like this, we will continue to seek operating efficiencies, pay close attention to control of costs, and preserve our highly liquid and strong balance sheet. We believe investors place a high value on our liberal cash dividend policy and conservatively capitalized financial position. Also, we continue to evaluate potential acquisition opportunities, but steadfastly resist overpaying for new businesses as we follow a well disciplined approach to externally generated growth. Fiscal 2009 will be a transition year as we continue to report record to near record operating results and introduce new products and enter new markets that will drive growth during fiscal 2010 and beyond. We are excited about entering the molecular testing market with our new platform. Our first product using this technology will be released later this fiscal year.”